Crypto investors are grappling with aggressive interest rate hikes from the U.S. Federal Reserve and a worsening liquidity crunch.
Celsius acts a lot like a bank, taking investors' crypto and lending it out to institutions to generate a return on deposits. It holds lots of assets in the so-called decentralized finance space.
Celsius, which says it is"acting in the interest of our community," did not return multiple requests for comment. Another key player, Three Arrows Capital, is in the midst of its own liquidity crisis. The $10 billion crypto hedge fund is reportedly on the brink of insolvency after the plunge in crypto markets reduces the value of its holdings.
3AC was an investor in Terra and has made leveraged bets on numerous tokens including bitcoin, ether and solana. Zu Shu, the firm's co-founder, said it was"in the process of communicating with relevant parties and fully committed to working this out." On Friday, he told The Wall Street Journal that 3AC was considering asset sales and a rescue by another firm to avoid collapse.
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